Fitch adds insurance-linked securities business, promotes execs

Fitch Ratings continued its business expansion and substantial reorganization of its executive lineup last week.

Fitch appointed John Bonfiglio as head of U.S. structured finance.

For Bonfiglio's part, the move expands his duties to include the RMBS group, in addition to his executive responsibilities in the domestic CMBS and ABS businesses. RMBS co-heads managing directors Glenn Costello and Joanne Sokolowski now report to Bonfiglio, along with ABS head and managing director Kevin Duignan and CMBS head and managing director Susan Merrick. Bonfiglio joined Fitch in 1993, served as co-head of its commercial mortgage group from 1997 to 2000 and led the residential mortgage group from 2001 to 2004. Then, he assumed responsibility for the ratings agency's commercial mortgage REIT and ABS groups.

The rating agency also formed a global analytical working group that will rate all forms of insurance-linked securities (ILS), including catastrophe bonds, redundant reserves, or Regulation XXX, disability income, catastrophic mortality and embedded value transactions. The rating agency appointed Donald Thorpe as head of the new ILS group, which will also fall under Bonfiglio's authority.

In a release, Fitch noted that about $5.6 billion in ABS issuance came from the ILS sector in 2005, and $8.9 billion in 2006. The rating agency expects volume for 2007 to increase by about 30% in 2007.

"Consolidating the two RMBS Operational Risk teams under a single manager will allow the synergy needed during this cycle in the industry," said Diane Pendley, managing director, Fitch Ratings in a release. "The quality of origination, uniqueness of products, and issues such as early payment defaults and fraud greatly impact the actions of the servicer. In reverse, the servicer's ability to monitor and report on these issues, as well as to contain or control defaults and losses they may cause, should be brought back into the review of the originators platforms."

The new head has been with the rating agency for the last 10 years and was key in developing Fitch's RMBS servicer rating program. Kelsch has mainly devoted her efforts into further refining the U.S. RMBS research and review of originator and issuer practices for the last five years.